My favourite financial planning book isn't about money

When planning for the future, don't neglect the present

The best financial planning book I ever read was written by a doctor, and has nothing to do with money. I knew exactly how it would end, and yet I still couldn’t put it down. I finished it in less than 24 hours, despite the several breaks I needed to dry my eyes.

There are a million books and blogs out there that will tell you how to top up your retirement account, build balanced portfolios, and sacrifice that daily latte for future riches. That’s the easy part.

The hard part is asking ourselves what we are saving all this money for in the first place. What kind of life do we want to build for ourselves and for the people we love? Nothing brings that into greater focus than considering our own mortality.

Remembering that I’ll be dead soon is the most important tool I’ve ever encountered to help me make the big choices in life. Because almost everything — all external expectations, all pride, all fear of embarrassment or failure – these things just fall away in the face of death, leaving only what is truly important.

Steve Jobs

When I’m working with someone who has “arrived,” at least financially, one of the biggest challenges they often face is figuring out what comes next. With no work priorities dictating how one is to spend their days, what is truly important?

Harvest

I find that for some people, particularly the people I work with, and the type of person who might be reading this, saving comes relatively easy. The excess income piles up over time, and eventually compounding works its magic, accelerating savings growth.

What can be difficult for some is spending down those savings. I seem to spend more time convincing a wealthy retiree that they can spend down their wealth, guilt free, than I do advising someone in the accumulation years to rein in their spending and save more for the future.

We have often been conditioned to think it’s a bad thing to spend on ourselves. Selfish. Wasteful.

Accustomed to watching a portfolio grow year after year, the idea of drawing it down makes some people anxious. And it’s not just the fear of running out of money. For most wealthy clients, that’s not really a problem.

Arriving at the point in your life where you begin spending down your savings brings you ever closer to your own mortality. The planting and growing seasons are done. The fall chill of the harvest has arrived.

Photo by Erik Witsoe on Unsplash

Mortality

“The doctor will be in soon.” And with that, the future I had imagined, the one just about to be realized, the culmination of decades of striving, evaporated.

When Breath Becomes Air was written by Paul Kalanithi in the first person. The author was a young neurosurgeon, diagnosed with terminal lung cancer. On the cusp of a career he had been working towards for most of his life, his future was snatched from him. The doctor became the patient.

My life had been building potential, potential that would now go unrealized. I had planned to do so much, and I had come so close.

He spent most of his life studying. Preparing for a future that he now would never experience.

What are we planning for? What if it never comes to pass?

Everyone succumbs to finitude… Most ambitions are either achieved or abandoned; either way, they belong to the past. The future, instead of the ladder toward the goals of life, flattens out into a perpetual present. Money, status, all the vanities the preacher of Ecclesiastes described hold so little interest: a chasing after wind, indeed.

Perhaps the book hit me so hard because I could relate to Paul’s path. I’ve spent my life being busy. Adding professional designations to my name. Chasing interesting work. Building up savings for a promised future day.

When Breath Becomes Air was a random book I picked up sometime in the spring of 2020. The long, dark days of that pandemic scarred year gave us all an opportunity to reflect on our lives, and many people didn’t like what they saw. There was a wave of retirements and career changes as we emerged from the government-mandated solitude.

While I distracted myself that year by writing a book, I also faced the reality that in many ways I had spent so much of my life working towards building a future that was already here.

The career. The family. The home we had settled in and made our own.

What was I waiting for?

Family

Paul and his wife had difficult discussions about whether or not they would try to have a child, despite his terminal diagnosis.

“Will having a newborn distract from the time we have together?” she asked. “Don’t you think saying goodbye to your child will make your death more painful?”

“Wouldn’t it be great if it did?”

Cooped up at home during the pandemic, tensions often ran high. It was particularly difficult for our children, who lost their external support systems - sports, physical activities, and time with friends and family. I was envious of the many people who celebrated the extra time they were able to spend with their families. In our home, we all needed a break from each other.

Somewhere around breaking up the thousandth fight that probably had to do with who ate the last Pop Tart, wishing to be anywhere else, reading these words stopped me cold.

We were taking so much for granted. And in the process of struggling through a very difficult time, forgot to take note of how lucky we were.

The End

The days are long, but the years are short.

I’ve always said that it’s not so bad getting older; it sure beats the alternative. But sometimes I look around and wish it could all go a bit more slowly. Reflecting on the past decades, it’s been a blur. Where did the time go?

We all have those days (or weeks… or months…) that never seem to end. We wish some seasons would pass. Life can be so difficult, and so unfair. But just as the difficult seasons pass, so do those wonderful moments, even more so if we forget to pay attention to them.

Investment professionals can often find themselves sharing the burdens of their clients, who over the years become friends. More than once, I have been one of the first calls when a scary diagnosis is received, or a tragic death occurs. My job is to reassure them that the plan is still on track. I tell them that everything will be okay.

But sometimes it isn’t. Paul Kalanithi died before he finished writing the book. The last words of his that you read in the book are a beautiful note to his daughter. His wife Lucy wrote the book’s epilogue. There was no happy ending; and yet, there was hope.

To pause, and to consider our mortality, is a gift. To remember what we are here for. To stop fussing about the number on the investment statement, trying to squeeze out a few more basis points of investment returns so that the line on the net worth projection ends up just a little bit higher.

Today

The art of financial planning, ultimately, is about balancing the enjoyment and demands of the present with an uncertain future. It’s an optimization problem with too many unknown variables. There are no correct answers.

But maybe… just maybe… some of us give too much weight to the future, forgetting to exist in the present.

What is it all for? Look around you.

The only thing guaranteed to us is right here, right now.

Why count the days, when even one day is enough for a man to know all happiness.

Fyodor Dostoevsky, The Brothers Karamazov